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Scenario A: 1 0 0 % Equity ( Zero Debt D / E = 0 ) JMC firm is currently 1 0 0 % equity

Scenario A: 100% Equity (Zero Debt D/E =0)
JMC firm is currently 100% equity financed, with an equity of $200,000. With zero debt, interest Expense =0
JMC Corp. sells 500,000 bottles of its herbal soda drinks per year. Each bottle produced and sold @ a unit sales price of $0.45 and has a unit variable cost of $0.25. The fixed operating costs for the firm are $40,000. The corporate tax for the firm is 25%.
Calculate the following:
Degree of Operating Leverage (DOL, Refer 13-2C)
Degree of Financial Leverage (DFL, Refer 13-2D)
Degree of Total Leverage (DTL = DOL * DFL)

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